Kaseya explores MSP business strategy shifts during pandemic

Cybersecurity is top of mind

Navigating an influx of cyberthreats during the pandemic, SMBs more frequently turned to MSPs for security expertise and support. Kaseya's study found 63% of MSPs were asked by clients for cybersecurity advice in 2020 -- an 8% increase compared with Kaseya's 2019 MSP survey.

In addition, 77% of MSPs said they had clients that were hit with at least one cyber attack in 2020.

Mike Puglia

"Cybersecurity has been consistently increasing as a concern in both [Kaseya's] MSP Benchmark and IT Operations surveys for several years," said Mike Puglia, chief strategy officer at Kaseya. "The current attack methods are generating tremendous illicit financial gains, with relatively little investment or expertise required. The volume of attacks will continue to increase until it becomes more difficult or expensive to yield results."

Puglia attributed the increase in cybersecurity issues to a few factors. The shift to supporting remote workers, new business models and new applications hindered IT teams' ability to keep pace with threats. Many remote workers lacked the same level of protection that was built into their office locations. Additionally, workers simply grew fatigued and therefore more vulnerable to phishing and other user-based attacks.

The heightened awareness to cybersecurity threats has influenced MSP business strategy. Kaseya has seen more MSPs begin to offer advanced services that involve 24/7 detection and response, security awareness training and anti-phishing products, Puglia noted.

Expanded compliance offerings

In addition to cybersecurity, regulatory compliance emerged as another hot topic for MSPs in 2020.

Sixty-nine percent of MSPs surveyed by Kaseya said their clients struggle to meet compliance requirements. Only about half of the MSPs said they currently provide compliance services to their clients. "MSPs are interested in adding compliance services to their service portfolio because they're seeing a growing need from their clients," Puglia said.

Kaseya also expects more MSPs to adopt compliance automation software to help support their clients' complex regulatory requirements, he added.

Customer acquisition challenges

Many MSPs found it difficult to acquire new customers last year, the Kaseya report found. Despite customers needing enhanced IT support as they rapidly migrated to remote work, many organizations -- especially in verticals like travel and hospitality -- saw their budgets shrink significantly.

COVID shined a light on the importance of IT and technology at every level of business.

Forty-three percent of MSPs reported difficulty in gaining new customers in 2020. "Simply put, the global economic shock of 2020 dwarfed that of 2008's Great Recession and was the largest economic downturn since the Great Depression," Puglia said. "Organizations were forced to massively reduce staff and costs and 'made do' with what they had, making it difficult for MSPs to acquire new customers."

Government spending and programs have kept the economy afloat. Puglia said he expects to see an incredible amount of pent-up demand in the second half of 2021.

"COVID shined a light on the importance of IT and technology at every level of business," he said. "Most businesses would not be here today if they did not have the technology to support remote work. Looking across forecasted spend, technology is the clear leader."